world diamond shortage

It's worth a read Folks.


Aussies missing diamond demand
Robin Bromby
November 20, 2006

A CALL will go out today to revive diamond exploration in Australia.
Industry veteran Ewen Tyler will tell the World Diamond Conference, opening in Perth this morning, that we are missing out on a boom market.
Diamond demand around the world is rising quickly and shortages are already showing up. Yet there has been no major discovery for 15 years.

Mr Tyler, who was a founding director of Ashton Mining, original operator of the giant Argyle diamond mine in Western Australia, now chairs North Australian Diamonds, which has revived the Merlin field in the Northern Territory.

But, in his speech to open the conference, he will tell the industry that it doesn't have much to show for all the work put in.

His view is that there are only three established operations in Australia: his own company's; the Ellendale operation of Kimberley Diamond Co; and Argyle, now owned by Rio Tinto.

He believes Australia has other big diamond discoveries to yield - if only someone would look for them.

He fears that, if natural diamond supplies dry up and prices rocket, this will encourage more manufacture of synthetic diamonds and eventually harm the whole industry.

"We need to get more action going in Australia," he said.

Native title and the huge cost of diamond exploration were making life more difficult.

Back in the 1960s it was possible to get access to land quickly, and it was feasible to conduct an exploration sweep across the Northern Territory from the West Australian border to the Queensland state line. He told The Australian that problems started during the Whitlam era when minerals and energy minister Rex Connor was, in his view, anti-mining.

Since then, generations of schoolchildren - his own grandchildren included - had been taught that mining was a dirty business.

The diamond conference comes against a background of falling world diamond production for the first time in 25 years.

From the heart of the world diamond mining industry, South Africa's Mining Weekly reports predictions that global production is likely to fall 2 per cent by 2015. BHP Billiton's Ekati mine in Canada is expected to be depleted that year.

But purchase of stones is booming, thanks to the growing middle classes in China and India. China's jewellery sales have doubled since 2001.

One London analyst quoted by the magazine said diamonds could outperform base metals in the next few years.

Yet the industry does not expect any big new mine coming into production in the foreseeable future.

The last big discovery of any note was in 1991 when a prospector found diamonds at Point Lake in Canada's Northwest Territories. That led to new mines in the area, including Ekati.

The other problem the diamond industry faces is the flow of illicit diamonds and money flowing into financing civil wars.

Ghana has been told by the World Diamond Council it has to strengthen its handling of diamonds thought to be smuggled out of Sierra Leone and Ivory Coast with the proceeds supporting rebel forces.

http://www.theaustralian.news.com.au/story/0,20867,20785394-643,00.html



Cheers


Xan